President Donald Trump will hold a rally on Friday US Steel A week after signalling that Japan had cleared a controversial merger with Japanese steel near Pittsburgh, the plant.
According to the White House, Trump will make his remarks at 5 p.m. at Irvin's work in West Mifflin, USA. Investors and members will hear from the president about what the deals announced between Steel and Japan in the US will take.
Trump described the deal as a “partnership” in a May 23 post on his social media platform Truth Social. The president said its US headquarters will remain in Pittsburgh, and that Japan will invest $14 billion in the US industrial icon for over 120 years in 14 months.
Trump told reporters on Sunday that the deal “is an investment, it's partial ownership, but it will be controlled by the United States.” However, the White House and businesses have provided little detail to the public about how the deal has been structured since Trump's announcement.
US Steel has described the transaction as a “merger,” which will become a “whole owned subsidiary” of Nippon Steel North America, but continues to operate as a separate company, according to a April 8 filing with the Securities and Exchange Commission.
A source familiar with the matter told CNBC's David Faber that Nippon is expected to close the US Steel acquisition at $55 per share. Biden claimed it would block Japan's proposed acquisition on national security grounds and put a critical supply chain at risk.
However, Trump ordered a new review of the contract in April, softening previous opposition to Japan's purchasing US steel. The president announced the “partnership” after the Committee on Foreign Investment in the United States (CFIU) concluded its review and recommended whether companies have found ways to “mitigate national security risks.”
“National Security Agreement”
Pennsylvania Sen. Dave McCormick told CNBC on Tuesday that the US government has a “golden share” that can determine many boards. US Steel has an American CEO and said the majority of the board comes from McCormick in the US.
“This is a national security agreement signed with the US government,” McCormick told CNBC's “Squawk Box.” “There's a golden share that essentially requires US government approval from many board members, which will ensure that the US does not cut production levels.”
“Golden Share” would not take the form of U.S. government shares, said James Blower, a partner in the litigation division of law firm Morrison Forrester. CFIUS, the committee that considered the transaction, has not negotiated profits on the stock, Blower said.
The blower, who represents his client on issues related to CFIUS, said the US government would take the form of a contractual right to refuse certain actions.
“It's certainly possible to have members of the board of directors, and this will become part of their overall corporate structure,” McCormick told CNBC. “Nippon Steel is trying to get involved in some way, but there is no control over the company,” White House trade adviser Peter Navarro told reporters Thursday.
“American steel owns the company,” Navarro said. US trade representative Jamieson Greer told CNBC on Friday that details of the Nippon Steel deal ” remained relatively confidential.”
“The fundamental principle is that the US needs to manage key key sectors, whether it's basic manufacturing or high-tech,” Greer said, “Squawk Box.” “If a foreign or foreigner or company wants to acquire these companies or invest large amounts, the US must maintain control of what is important.”
United steelworkers, who were originally opposed to the contract, said the union “can't speculate” about the impact of Trump's announcement “without further information.”
“Our concern is that Japan, a foreign company with a long and proven track record of violating trade laws, will further erode steelmaking capabilities in the country, putting thousands of good jobs at risk,” USW President David McCall said in a statement.